Vol. 242 No. 13
asked the Minister for Finance what action he proposes to take in relation to the import-export trade gap; and whether it is possible for him to introduce a more reliable system of assessing import-export trade flows so that he may have more accurate information and so that he can communicate more accurate information, including forecasting, to the House, especially in relation to Dáil questions.
42.
asked the Minister for Finance what is his present estimate as to the likely balance of payments deficit for this year.
43.
asked the Minister for Finance if it is the intention of the Government to introduce corrective measures arising from the announcement that during the twelve months which ended last October the trade gap increased by more than £68 million to £218.1 million.
44.
asked the Minister for Finance if his attention has been drawn to the deterioration in the trade figures; and what action he intends to take to remedy the situation.
45.
asked the Minister for Finance what action he proposes to take in view of the considerable worsening of the balance of payments position as revealed by the October trade figures.
With your permission, a Cheann Comhairle, I propose to take Questions Nos. 41 to 45 together.
The provisional trade figures for October which were released last week showed an increase in the import excess of £6 million as compared with October, 1968. While exports rose by £5 million, imports were £11 million higher. The increase in imports includes £6 million attributable to imports of aircraft and machinery, which add to our stock of capital, and a large part of the balance was attributable to imports of materials for further production.
In regard to the forecast of the balance of payments for the year as a whole, I am informed that sales of aircraft abroad valued at about £4½ million which were scheduled to take place in the last quarter of the year are likely to be postponed until 1970. My pre-budgetary forecast of £55 million in 1969 for the balance of payments deficit may therefore have to be revised to this extent though the postponement is of no economic significance.
As I have been stressing, we cannot continue to incur balance of payments deficits of this year's order of magnitude without damaging effects on confidence and growth prospects. I am keeping the situation under close observation and will take any steps necessary to ensure that steady growth of the economy is not hampered by excessive demand pressures.
With regard to the second part of Deputy Corish's question I would refer him to my answer to his question of 13th November, 1968, in which I gave him a detailed account of the short-term forecasting techniques used by the Department of Finance and the review procedure by which these are up-dated. I pointed out that the techniques were those adopted internationally for purposes of demand management.
Is the Minister aware that in the last three months there was an import excess of £12 million? Does he not think this import excess is having a very bad effect on the availability of capital here for private enterprise and the employment of our people in productive work?
It has no bearing.
With respect, I disagree with the Minister. Does the Minister not know that we have to pay for things we buy from abroad?
One of the surprising things is that despite the continuing deficit in our balance of payments our external assets are increasing.
Does the Minister not realise that this constant threat, "I will take steps one of these days" is likely to increase imports? Surely the Minister is aware that importers take steps because of this constant threat and the effect is to increase our imports?
I do not think it does. Another factor of the situation is that the import excess is due only marginally to consumption goods, it is almost entirely due to either capital goods or materials for further production.
Would the Minister not agree, on the basis of the figures he furnished to me in reply to a recent Parliamentary Question, that even if one assumed the whole net invisible receipts which he forecast for the year were earned in the first ten months, that the external deficit for the 12 months ended October is now between £60 million and £63 million? Would the Minister now say on what grounds —in the light of this deteriorating trend —he expects the deficit to be £59½ million now that he has added on this £4½ million for aircraft? Does the Minister expect the position to improve in the last two months of the year?
I expect the balance of payments deficit for this year will, as I have already said, be £55 million, subject to this adjustment of £4½ million in respect of aircraft.
Does the Minister expect, in making this adjustment for aircraft, that there will be a reduction of between £1½ million and £4½ million in the trade deficit in the last two months of the year by comparison with the last two months of last year?
I am not responsible for the Deputy's figures.
These are the Minister's figures.
I am only in a position to tell the Deputy that my most recent estimate of our balance of payments deficit this year is that it will be, what I said it would be, namely £55 million plus perhaps £4½ million due to the non-receipt of moneys from the sale of aircraft.
Is the Minister not aware that the figures I have used are the Minister's own figures? Would the Minister indicate on the basis of the figures he gave me here he is assuming this reduction in the external trade deficit will take place in the last two months of the year?
I cannot understand the Deputy and I am not alone in that.
